It would show that ‘projects can ultimately be scuttled by an arbitrary political decision made without any transparency’

A rejection of Teck Resources Ltd.’s enormous oilsands project would draw a very serious response from Alberta and send a “devastating” message to global investors, Premier Jason Kenney said Friday.
The federal government must decide by month’s end whether to approve Teck’s $20.6-billion Frontier Mine, which is expected to employ 7,000 workers in the heartland of Canada’s beleaguered oil industry. Ottawa is currently working on an aid package for Alberta intended to soften the blow if the project is blocked, Reuters reported Thursday.
“It’s hard to overstate the response of Albertans, not just our government, but Albertans broadly, if this project were to be rejected,” Kenney told an audience at the Canada Institute in Washington.
Teck has already spent $1 billion during the past decade to clear a series of regulatory hurdles, invest in technology designed to lighten the mine’s carbon footprint and forge agreements with First Nations groups, Kenney said. A rejection from Ottawa now would signal to investors that despite such efforts, projects can ultimately be scuttled by an “arbitrary political decision” made without any transparency, he said.
“I think that would be a devastating message to send in terms of investor confidence at a time when we are struggling to attract foreign direct investment to the Canadian economy,” he said, speaking alongside Saskatchewan Premier Scott Moe. “So the response would be very challenging.”
Demand for crude oil will continue during the coming decades even as energy transitions away from fossil fuels, Kenney added, and it’s better that the last barrel of oil come from “a stable reliable democracy with the highest environmental and human rights labour standards on earth. Teck represents a pathway to that.”
Teck chief executive Don Lindsay recently raised doubts about whether the Frontier project will ever be completed, saying it would depend on both pipeline access and world oil prices.
Asked about these comments, Kenney said Teck executives told him that “they’re confident it can be built, but it can’t be built without a permit.”
We cannot afford to risk for a day trade stability in North America
Alberta Premier Jason Kenney
Tensions over the Teck project come as Ottawa attempts to mend a severe rift with Western provinces. The Liberals failed to win a single seat in either Saskatchewan or Alberta in the October election when the party was reduced to a minority government.
The election results speak to the “divisions we have in our nation,” Moe said. “I think, in fairness, that manifested itself on election night.”
Prime Minister Justin Trudeau has since appointed Deputy Prime Minister Chrystia Freeland to work directly with the provinces, with a particular focus on addressing differences with the West.
“We’ve had the opportunity to open up a strong dialogue,” Moe said of the appointment. “I would say it’s probably the strongest dialogue that we have had since the Liberal government came to power just over four years ago.”
Calling the relationship with Ottawa “much more constructive” since the election, Kenney said they were finding common ground on more issues and shared virtually identical views on trade. Both premiers support quick approval of the United States-Mexico-Canada Agreement currently being debated in Parliament. Canada is the last of the three countries to ratify the pact.
All the premiers agree that ratification should happen as quickly as possible and should not become a matter of political contention in Ottawa, Kenney said.
“There is a reinvigorated protectionist sentiment in Washington on both ends of Pennsylvania Avenue and we don’t want to take any risks, any challenges or leave any gaps,” he said. “We cannot afford to risk for a day trade stability in North America.”
Though questions about the treatment of dairy, aluminum and softwood under the new trade deal are real, the benefits of the deal far outweigh those concerns, Moe said, adding that work with the U.S. on those issues will continue once the agreement is ratified.
Financial Post